AP News, November 23rd, 2007
ArcelorMittal, the world's biggest steel company, said it was in talks with China Oriental Group Ltd. about increasing its stake in the Chinese steel products maker.
ArcelorMittal bought a 28 percent stake in China Oriental for $647 million earlier this month.
The Luxembourg-based steelmaker said in a statement Thursday it was in talks with controlling stakeholders in China Oriental about future cooperation and increasing its stake in the Hong Kong-listed company. It gave no further details.
China Oriental's shares have been suspended from trading on the Hong Kong stock market since Nov. 7, when the first ArcelorMittal share purchase was announced.
"China Oriental is not at liberty to discuss any issues prior to the posting of a formal announcement, which is currently being prepared," the Chinese company said in a statement.
However, according to a company filing to the Hong Kong Stock Exchange earlier this month, ArcelorMittal increased its long position in China Oriental to the equivalent of a 73.1 percent stake from 28 percent. But it was unclear whether the position reflects an actual increase in shareholding.
Officials at the Hong Kong exchange could not be immediately reached for clarification.
It would be a rare step for China to allow foreign ownership of a steelmaker since the industry is among many that the country deems strategically important enough to retain a state majority ownership in most cases.
ArcelorMittal has been expanding its investments as it seeks to build its position in the world's biggest steel-making and consuming market.
The company recently announced it had bought 90 percent of Shandong-based Chinese steel wire company Rongcheng Chengshan Steelcord for $26.6 million.
However, ArcelorMittal's bid for a 38 percent stake in mid-sized steelmaker Laiwu Steel Corp., also based in Shandong, stalled after Chinese regulators demanded a higher price to let the deal go through.
China Oriental makes steel billets, strips, cold-rolled and galvanized steel at factories in Hebei province in northern China and in Guangdong province in the south.
